By RACHEL LA CORTE, THE ASSOCIATED PRESS

Published 10:00 pm, Tuesday, May 9, 2006

Grays Harbor County will be home to an enormous biodiesel production plant under an agreement announced Tuesday involving Seattle-based Imperium Renewables.

The plant, to be built on land owned by the Port of Grays Harbor between Aberdeen and Hoquiam, will produce 100 million gallons of biodiesel a year. Construction began recently on a plant that will produce 85 million gallons per year in Velva, N.D.

Last year, national biodiesel production was just 75 million gallons, according to the Missouri-based National Biodiesel Board. By the end of the year, that number is expected to double.

Tuesday's announcement was made in Aberdeen by executives with the port and the company.

"These are exciting times," said John Plaza, president and founder of Imperium Renewables. "As petroleum prices increase and global warming becomes more a threat, people are paying attention."

Biodiesel is a generic term for any clean-burning alternative fuel made from domestic, renewable resources. Soybean oil is the primary component for biodiesels now made in the United States.

The biodiesel blend that will be used by Imperium Renewables will be refined from a mix of canola grown in Washington, soy and other crops.

Imperium Renewables is the parent company of Seattle Biodiesel, which now produces 5 million gallons of biodiesel a year at a plant in Seattle.

The $40 million plant would create 250-350 jobs during its construction and is expected to create 50 permanent jobs once it is up and running.

It was welcome news to a hard-pressed region that has had major unemployment after fishing and timber have declined, especially after last year's closure of a Weyerhaeuser large-log sawmill that cost 97 people their jobs. The company's Cosmopolis pulp mill is scheduled to close sometime this year, displacing 245 workers.

"Anything we can do to generate family wage jobs is a real boon to us," said Gary Nelson, executive director of the Port of Grays Harbor.

Construction is expected to begin by July and could be completed by next summer.

The state Department of Agriculture said the Seattle Biodiesel plant is the only known commercial plant up and running in the state; a facility in Sunnyside is expected to be open in July with a crushing facility and biodiesel refinery.

As drivers face soaring gasoline prices at the pumps, demand for alternative fuels has increased.

This year, lawmakers made Washington only the second state in the country with biofuel and biodiesel mandates, to be implemented by December 2008. Budget writers also designated millions of dollars for biofuel low-interest loan programs to plant the seeds for the production, refining and infrastructure for alternative fuels.

Gov. Christine Gregoire said the new plant will help the coastal region diversify its economy and put the state at the forefront of the biodiesel industry.

"We have to, as a state, lead the country in producing alternatives to imported petroleum," she said during a call from Australia, where she is on a trade mission. "We must have energy independence from foreign oil."